Do I Have to Notify My Insurer if I Don’t Renew My Auto Policy?
When you receive a renewal notice from a car insurance company or broker, and you do not reply, your policy is automatically renewed.
While there’s nothing wrong with switching providers, if you do decide to purchase a policy from a different company, it’s in your best interest to let your former insurer know you do not wish to renew.
Consider this gentleman’s situation:
His auto insurance policy was up for renewal but he decided not to renew it and went elsewhere, however, he didn’t notify my former insurer. The man received a letter from his former insurer stating that he owed them for two-and-a-half months’ worth of coverage. His former insurer also stated they sent an insurance cancellation notice to his auto loan lender, though they were unaware he had in fact been insured the whole time.
While the best course of action would have been to inform his original insurer of his move, at this point the resolution would be to send a copy of the new policy to the prior insurance company showing that you had insurance with the new company starting at the expiry date of your old policy.
The former insurer should waive the cost of the two-and-a-half months as this driver was insured elsewhere. Also, they should send a copy of the new policy to the auto loan lender.
It is legal for your former insurer to send a notice to your lender as they are listed on your policy as having a financial interest in your car until the loan is fully paid.
In the future, if you change insurance companies, always notify the car insurance company in writing that you are not planning on renewing your policy.